Looking back on the first year of his second term, President Donald Trump boasts that he has resurrected the American economy by imposing big import taxes on foreign products.
He made his case in a recent opinion piece in The Wall Street Journal, chiding the paper and critics, including mainstream economists, who predicted that tariffs would backfire, raising prices and threatening growth. “Instead,” the Republican president wrote, “they have created an American economic miracle.”
But the proof he offers is often off-base or wrong altogether.
Here’s a look at the facts around Trump’s assessment of tariffs:
Trump Claim 1: Tariffs have ignited U.S. economic growth
CLAIM: “Just over one year ago, we were a ‘DEAD’ country. Now, we are the ‘HOTTEST” country anywhere in the world!’ ’’
THE FACTS: This is a standard statement from Trump. But the U.S. economy was hardly “dead’’ when Trump returned to office last year. And in Trump’s second term, it’s performed strongly — after getting off to a bumpy start.
In 2024, the last year of the Biden presidency, American gross domestic product grew 2.8%, adjusted for inflation, faster than any wealthy country in the world except Spain. It also expanded at a healthy rate from 2021 through 2023.
The numbers for all of 2025 aren’t out yet. But during the first three quarters of the year, Trump’s tariffs — or the threat of them — delivered mixed results for the American economy.
From January to March, U.S. GDP actually shrank for the first time in three years. The main culprit was easy to identify: a surge in imports, which are subtracted from GDP, as American companies rushed to buy foreign products before Trump could impose tariffs on them.
But growth rebounded in the second half of the year. From April through June, the economy expanded at a healthy 3.8% pace. And from July through September, it grew even faster — 4.4%. A big part of the surge was a drop in imports, likely reflecting Trump’s tariffs as well as the fact that importers had already stocked up at the start of the year. Strong consumer spending also drove economic growth.
Trump also likes point to solid gains in the U.S. stock market. He noted that stocks hit new highs 52 times in 2025. It’s true that the American stock market did well last year. But it underperformed many foreign stock markets. The benchmark S&P 500 index climbed 17% — a nice gain but short of a 71% surge in South Korea, 29% in Hong Kong, 26% in Japan, 22% in Germany and 21% in the United Kingdom.
Trump Claim 2: Tariffs are slashing inflation
CLAIM: “Annual core inflation for the past three months has dropped to just 1.4% — far lower than almost anyone, other than me, had predicted.”
THE FACTS: The president is using cherry-picked data to vastly exaggerate where inflation stands.
His figure for annual inflation in the past three months — which excludes the volatile food and energy prices — is low, but reflects data distorted by the government shutdown in October and November, which disrupted the government’s data collection and forced the agency that compiles the figures to plug in rough estimates in some categories that artificially lowered overall inflation.
Annual core inflation for the final six months of 2025 is higher at 2.6%. That is down from January 2025’s level but about where it was in October 2024. Overall, inflation has leveled off this year, and was 3% in September before the government shutdown, the same as it had been in January 2025.
It’s true that inflation hasn’t been as high as many economists worried it would be when Trump started rolling out tariffs last spring, but that is partly because many of the “Liberation Day” tariffs were withdrawn, reduced or riddled with exemptions. When Democrats won some high-profile elections last year by highlighting “affordability” concerns, the administration rolled back existing or planned tariffs on coffee, beef and kitchen cabinets, for example, a backhanded acknowledgment that the duties were raising prices.
The impact of tariffs can be more clearly seen in core goods prices, which also exclude food and energy. Before the pandemic, core goods costs typically barely rose — or even fell — each year, but last December they were 1.4% higher than a year earlier. That was the largest increase, outside the pandemic, since 2011.
Alberto Cavallo, an economist at Harvard and the author of a study on the impact of tariffs cited by Trump in his op-ed, has found that Trump’s tariffs have boosted overall inflation by roughly three-quarters of a percentage point.
Trump Claim 3: Other countries are paying most of the burden
CLAIM: “The data shows that the burden, or ‘incidence,’ of the tariffs has fallen overwhelmingly on foreign producers and middlemen, including large corporations that are not from the U.S. According to a recent study by the Harvard Business School, these groups are paying at least 80% of tariff costs.”
THE FACTS: The study Trump cited appears to conclude the opposite of what Trump claimed. Authored by Cavallo and two colleagues, it finds that “U.S. consumers were bearing roughly 43% of the tariff-induced border cost after seven months, with the remainder absorbed mostly by U.S. firms.” Cavallo said by email that import prices hadn’t fallen much, “which suggests foreign exporters did not reduce their pre-tariff prices enough to shoulder a large share of the burden.″
Trump Claim 4: Tariffs are slashing the deficit
CLAIM: “We have slashed our monthly trade deficit by an astonishing 77%.”
THE FACTS: This claim involves more cherry-picking, reflecting the percentage drop from a very high trade deficit in January 2025, when the president took office, to a super-low deficit in October.
The story is more complicated than the president makes it. The trade deficit — the gap between what the U.S. sells other countries and what it buys from them — has actually risen since he returned to the White House.
From January through November in 2025, the U.S. accumulated a trade deficit of nearly $840 billion, up 4% from the same period of 2024. In the first three months of 2025, importers rushed to buy foreign products — before Trump could slap tariffs on them. After that, monthly trade deficits came in consistently lower than they were in 2024. But the January-March import surge was so big that the 2025 year-to-date trade deficit still exceeds 2024’s.
Trump Claim 5: Tariffs are driving American investments
CLAIM: “I have successfully wielded the tariff tool to secure colossal Investments in America, like no other country has ever seen before. … In less than one year, we have secured commitments for more than $18 trillion, a number that is unfathomable to many.’’
THE FACTS: Trump did, in fact, use the tariff threat to pry investment commitments from America’s major trading partners. The European Union, for instance, pledged $600 billion over four years.
But Trump hasn’t said how he came up with $18 trillion. The White House has published a figure of $9.6 trillion, which includes private and public investment commitments from other countries.
Researchers at the Peterson Institute for International Economics last month calculated the investment pledges at $5 trillion from the EU, Japan, South Korea, Taiwan, Switzerland, Liechtenstein and the Persian Gulf states of Saudi Arabia, Qatar, Bahrain and the United Arab Emirates.
And they raised doubts about whether the money will actually materialize, partly because the agreements are vague and sometimes because the countries would strain to afford the commitments.
But all the numbers are huge nonetheless. Total private investment in the United States was most recently running at a $5.4 trillion annual pace. In 2024, the last year for which figures are available, total foreign direct investment in the United States amounted to $151 billion. Direct investment includes money sunk into such things as factories and offices but not financial investments like stocks and bonds.
